Toshiba kicked off a project Friday that is the first step toward a new type of memory chip that could provide vastly greater capacity at a lower cost for digital gadgets such as cameras, smartphones and tablets.

The company held a groundbreaking ceremony to begin expansion of its number-five chip fabrication building (fab 5) in Yokkaichi, a state-of-the-art chip production facility in central Japan operated by Toshiba and SanDisk under a joint venture.

The construction, which is scheduled to last a year, will see the production line expanded to accommodate additional chip fabrication capacity for NAND flash memory, including more advanced conventional manufacturing processes and early generation 3D production techniques.

3D chips are tipped to be the next big thing in the memory market and provide greater data storage capacity by stacking memory cells in layers. Using this method, greatly higher storage capacity can be realized while keeping the chips small enough to fit inside flash memory cards and the cramped insides of modern gadgets.

The project also indicates Toshiba's intention to remain a leader in the competitive flash memory market and also the company's belief that the market will continue to expand.

"After giving careful consideration to the balance of product supply and demand, and noting a recovery driven by growing demand for smartphones, tablets, SSD for enterprise servers, Toshiba now anticipates further medium- to long-term market expansion," the company said in a statement.